gary17 Posted September 29, 2015 Share Posted September 29, 2015 I don't own But just an observation that generic drug companies seem to have terrific pricing power ! Link to comment Share on other sites More sharing options...
rishig Posted September 29, 2015 Share Posted September 29, 2015 I don't own But just an observation that generic drug companies seem to have terrific pricing power ! I am not sure what you meant by saying "generic drug companies seem to have terrific pricing power". Generic drug companies in general have very little no pricing power. When there are several substitutes (which is generally the case after the first six months of patent expiration), the pricing power is in the hands of the large drug distributors (CVS, Walgreens). Given all the substitutes have the same chemical composition, the pharmacy has the right to replace any patented drug with a generic substitute of its choice. The large pharmacy chains use the leverage of large volume to have a generic be exclusively dispensed in return for massive margins. The patent cliffs have been a great boon for the last decade to the two pharmacy chains. What you really meant, I think, is that given that Valeant has mostly generic drugs in its portfolio, it is strange that is has this pricing power. A few thoughts: Many of the drugs where Valeant exercised pricing power are not just generic but also orphaned. There is no other substitute, so the power equation switches back to the manufacturer (from the distributor) in this case. I have no horse in this race and I am not qualified to comment specifically on how big this portfolio is compared to its total revenue stream. There have been other comments on the thread addressing this. I have been an investor in the pharmacy chains and very familiar with how the industry works, so I just wanted to reply back to the "pricing power" comment. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 This is why Cash EPS is misleading. It doesn't really represent "earnings power" because they shouldn't add back any amortization that coincides with terminating revenue streams (which is all of their amortization charges). It is a real expense that is necessary to account for debt repayment and they have to repay nearly all of their debt before Salix IP expires in 2029 - which is not as far away as you'd think. As I have already said, I believe this is wrong. As long as you see organic growth, I don’t see why Cash EPS should be misleading. When organic growth starts to falter, then it will be the time to worry… As far as repayment of debt is concerned, they have already proven they are able to decrease their debt load very quickly, just after a few quarters without acquisitions. They have already proven your worry wrong. Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 Anyway, first that “Hillary” thing… then this “subpoena” thing… They have introduced a risk I hadn’t thought of until yesterday… Is the government hindering VRX’s business? And it is an uncertainty I don’t know how to judge. Therefore, I am taking my losses (at least I won’t pay taxes for 2015! ;D ;D), and start watching from the sidelines... again (just as I had previously done, when I thought there was not enough evidence about organic growth). I truly believe that “government” risk will end up in nothing… When that uncertainty finally clears, I am surely buying again. Cheers, Gio Link to comment Share on other sites More sharing options...
tombgrt Posted September 29, 2015 Share Posted September 29, 2015 Anyway, first that “Hillary” thing… then this “subpoena” thing… They have introduced a risk I hadn’t thought of until yesterday… Is the government hindering VRX’s business? And it is an uncertainty I don’t know how to judge. Therefore, I am taking my losses (at least I won’t pay taxes for 2015! ;D ;D), and start watching from the sidelines... again (just as I had previously done, when I thought there was not enough evidence about organic growth). I truly believe that “government” risk will end up in nothing… When that uncertainty finally clears, I am surely buying again. Cheers, Gio Dude no offense but have you not learned anything from all those books you read? What do you mean "when the uncertainty clears"? That's a big part of investing in stocks, being able to face uncertainty when others run for the hills. It's all about temperament. In fact, lately I'm inclined to believe temperament is far more important than intelligence and specific analytical skills will ever be. Some people just can't do it, no matter how smart they are. They get sick just thinking of a company like KO dropping 10%+ on no news. Days like today should feel like Christmas to any rational investor. Here you were, pounding the table on how valuation wasn't your number one concern because Valeant is such a great business and how it has a great future. Likely hundreds of posts from you in this thread alone. And one day of adversity and you are ready to bail? Sorry, I just don't get it. You'll never be able to get those 15%/year returns that way, let alone be able to hold any "great" business for long periods of time. It's an absolute given that even the very best of your holdings will sometimes plummet. And trust me, 20% in 5 days is absolutely nothing, especially for highly leveraged companies that ran up a lot lately. If you can't face that fact about investing in stocks, there is no point in owning them in the first place. As a side note: How hard did you think this through if you didn't think about possible regulatory risk given VRX's model (partly) of jacking up prices of acquired drugs? I have read a few comments about this industry practice in European and Belgian news lately and I don't follow the sector at all. I'm sure you should have seen or looked up some of those at one point as well? Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 Dude no offense but have you not learned anything from all those books you read? What do you mean "when the uncertainty clears"? That's a big part of investing in stocks, being able to face uncertainty when others run for the hills. It's all about temperament. In fact, lately I'm inclined to believe temperament is far more important than intelligence and specific analytical skills will ever be. Some people just can't do it, no matter how smart they are. They get sick just thinking of a company like KO dropping 10%+ on no news. Days like today should feel like Christmas to any rational investor. First of all you must have confidence in your judgement. Otherwise expressions like “It is all about temperament” simply border on recklessness. Let’s say I tend to react rather than predict. When I see things clearly enough, a stock price that goes down leaves me indifferent. When I don’t see things clearly, a stock price that goes down gives me stomachache… and stomachache is not good for business, because also your brain starts to suffer. You might argue that the chances to make lots of money reacting rather than predicting are lower… It might be so… But I don’t care. Here you were, pounding the table on how valuation wasn't your number one concern because Valeant is such a great business and how it has a great future. Likely hundreds of posts from you in this thread alone. And one day of adversity and you are ready to bail? Sorry, I just don't get it. You'll never be able to get those 15%/year returns that way, let alone be able to hold any "great" business for long periods of time. It's an absolute given that even the very best of your holdings will sometimes plummet. And trust me, 20% in 5 days is absolutely nothing, especially for highly leveraged companies that ran up a lot lately. If you can't face that fact about investing in stocks, there is no point in owning them in the first place. Again, you misread my comment about valuation… In fact I said that if VRX were overvalued, it might be dead money for a while… Instead, I said that valuation was not my n.1 concern because FRAUD was it! Do you understand that fraud is a completely different and much more dangerous beast?! And yes! FFH has plummeted in price many a time during the 5 years I have hold it. Yet, no problem! Why? Again, because things were clear to me. I don’t know if there was a point in owning FFH for 5 years… I am happy I made lots of money… But feel free to judge by yourself and think whatever you please! As a side note: How hard did you think this through if you didn't think about possible regulatory risk given VRX's model (partly) of jacking up prices of acquired drugs? I have read a few comments about this industry practice in European and Belgian news lately and I don't follow the sector at all. I'm sure you should have seen or looked up some of those at one point as well? Well, I think I have read every single bear argument, and “government intervention” was barely mentioned if at all! Evidently, not many people thought about it. I surely might have, but sincerely I must have dismissed it as a very low probability… I really don’t understand why you keep commenting my posts… I don’t read yours… I don’t want to… Except of course when you comment mine… Then I am forced to read what you post and to reply… But it is a terrible waste of time! I ask you again: please, given the fact you don’t agree with my ideas, why keep reading them?! Just stop, won’t you? There are myriads of other posts to read! Wouldn’t it be much easier if you read those and just ignore mine?! Thank you! Gio Link to comment Share on other sites More sharing options...
writser Posted September 29, 2015 Share Posted September 29, 2015 I really don’t understand why you keep commenting my posts… I don’t read yours… I don’t want to… Except of course when you comment mine… Then I am forced to read what you post and to reply… But it is a terrible waste of time! I ask you again: please, given the fact you don’t agree with my ideas, why keep reading them?! Just stop, won’t you? There are myriads of other posts to read! Wouldn’t it be much easier if you read those and just ignore mine?! Thank you! Gio Because it is painful to watch you self-destruct from the sidelines. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 Because it is painful to watch you self-destruct from the sidelines. Ahah!! But I am barely underwater for the year… After compounding at 22% during the last five years… Are you really worried about my financial well-being?! writser, you are funny! Cheers, Gio Link to comment Share on other sites More sharing options...
kirkomi Posted September 29, 2015 Share Posted September 29, 2015 So Gio, How do you feel about Pershing Square now, given that they hold substantial amount of VRX ? Regards -Ch Link to comment Share on other sites More sharing options...
tombgrt Posted September 29, 2015 Share Posted September 29, 2015 Dude no offense but have you not learned anything from all those books you read? What do you mean "when the uncertainty clears"? That's a big part of investing in stocks, being able to face uncertainty when others run for the hills. It's all about temperament. In fact, lately I'm inclined to believe temperament is far more important than intelligence and specific analytical skills will ever be. Some people just can't do it, no matter how smart they are. They get sick just thinking of a company like KO dropping 10%+ on no news. Days like today should feel like Christmas to any rational investor. First of all you must have confidence in your judgement. Otherwise expressions like “It is all about temperament” simply border on recklessness. Let’s say I tend to react rather than predict. When I see things clearly enough, a stock price that goes down leaves me indifferent. When I don’t see things clearly, a stock price that goes down gives me stomachache… and stomachache is not good for business, because also your brain starts to suffer. You might argue that the chances to make lots of money reacting rather than predicting are lower… It might be so… But I don’t care. I'm wreckless for placing valuation first and seeing the importance of temperament so ignore what is beneath as you please... 1. You clearly have shit confidence in your judgement as all it takes for you to bail out is a subpoena that isn't anything yet. Let's face it, you get spooked out by stock movements. Your "20% drop in 5 days is rare" comment already showed that. 2. If you truly think that reacting is better than predicting (a.k.a. investing a.k.a. buying assets that you predict to be valued higher in the future.......), you'll be forever behind the curve. Go be a lemming then. If you believe what I say might be true but simply don't care, there is indeed nothing to be discussed. You are literally saying "Maybe you are right but if you are I'll act like you aren't and keep doing something I shouldn't." You could just as well become schizophrenic and talk to yourself all day. Here you were, pounding the table on how valuation wasn't your number one concern because Valeant is such a great business and how it has a great future. Likely hundreds of posts from you in this thread alone. And one day of adversity and you are ready to bail? Sorry, I just don't get it. You'll never be able to get those 15%/year returns that way, let alone be able to hold any "great" business for long periods of time. It's an absolute given that even the very best of your holdings will sometimes plummet. And trust me, 20% in 5 days is absolutely nothing, especially for highly leveraged companies that ran up a lot lately. If you can't face that fact about investing in stocks, there is no point in owning them in the first place. Again, you misread my comment about valuation… In fact I said that if VRX were overvalued, it might be dead money for a while… Instead, I said that valuation was not my n.1 concern because FRAUD was it! Do you understand that fraud is a completely different and much more dangerous beast?! Let's debunk that: In theory you could easily have a fraud sensitive stock that is cheap enough to be a better value than an expensive stock with little risk of being a fraud. So to me that translates to valuation always being the number one concern. Everything can be a value (or good short!) at one point. The fact that you can't seem to grasp that concept is concerning. And yes! FFH has plummeted in price many a time during the 5 years I have hold it. Yet, no problem! Why? Again, because things were clear to me. I don’t know if there was a point in owning FFH for 5 years… I am happy I made lots of money… But feel free to judge by yourself and think whatever you please! Well since you gave the invite to my judgement: It "plummeted" once in 2012 and that was hardly something to write home about. Sadly things were clear for you on the wrong time. Or would you call your returns in FFH a great achievement? Things were clear for you again when you sold out a few weeks ago, exactly when the thesis you believed in finally started playing out. As a side note: How hard did you think this through if you didn't think about possible regulatory risk given VRX's model (partly) of jacking up prices of acquired drugs? I have read a few comments about this industry practice in European and Belgian news lately and I don't follow the sector at all. I'm sure you should have seen or looked up some of those at one point as well? Well, I think I have read every single bear argument, and “government intervention” was barely mentioned if at all! Evidently, not many people thought about it. I surely might have, but sincerely I must have dismissed it as a very low probability… I really don’t understand why you keep commenting my posts… I don’t read yours… I don’t want to… Except of course when you comment mine… Then I am forced to read what you post and to reply… But it is a terrible waste of time! I ask you again: please, given the fact you don’t agree with my ideas, why keep reading them?! Just stop, won’t you? There are myriads of other posts to read! Wouldn’t it be much easier if you read those and just ignore mine?! Thank you! Gio Believe it or not but my post comes from a desire to help us all become better investors. You might feel like I'm "out to get you" (and I admit you push my buttons which leads me to comment more directly) but I simply believe you make a lot of bad decisions investment wise and you don't seem to learn. I prefer open and direct communication over acting like I agree with everything you say or even ignoring you. You should welcome opposite views instead of putting your head in the sand. But if you feel you don't get any value out of it, I'll stop making the effort of directing it to you. I'll copy your ostrich policy and start making use of that Ignore function from now on. Consider it activated. ;) Link to comment Share on other sites More sharing options...
Picasso Posted September 29, 2015 Share Posted September 29, 2015 I think that it has been obvious gio likes a certain kind of stock. Long runway of growth, good jockey, a good track record, etc. I can understand the attraction but can't always understand the timing or valuation. But gio is learning just like the rest of us so no big deal unless he starts being extremely destructive. By the way gio, I think we've been doing the opposite trades of each other on this stock for a while. I bought around $112 last year (when you sold), sold around $230 (when you bought), and just bought again at $165 (when you sold). We're obviously thinking about this investment in completely different ways. Besides understanding just the business and valuation, it's also important to understand the changes in investor sentiment. Your best investments will often have the most uncertainty and experience crappy 50% drops. We all try and get around this in various ways by understanding as much as possible or avoiding overowned/overloved stocks, but you generally have to be okay with that kind of thing no matter what you invest in. I personally don't think a tweet or a request for information (although confusing why Valeant refused, similar to Ocwen last year) changes the value of the company by over $30 billion. Also, some of the best investors know when to cut their losses when their thesis didn't play out. It sounds like gio's thesis didn't play out and he's cutting his losses. At least he isn't sticking his head in the sand and letting it get potentially worse. I personally have a lot of respect for that as most investors just start digging themselves in further when the wheels start falling off the bus. A side note: if you look at investor sentiment of VRX on stocktwits, it's at like 15% bullish from 90% bullish a month or two ago. Just thought I'd mention it since almost everyone on there HATES this stock. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 1. You clearly have shit confidence in your judgement as all it takes for you to bail out is a subpoena that isn't anything yet. Let's face it, you get spooked out by stock movements. Your "20% drop in 5 days is rare" comment already showed that. Of course you can believe whatever you want… The truth is: any highly levered company must keep generating lots of cash, like VRX has always done. What happens to that cash if the government intervenes? I am not saying it risks to get impaired, but I am saying that I don’t know… And when there is something so important that I don’t think I can judge with enough confidence, I am not comfortable holding the shares anymore. This is it! Period. 2. If you truly think that reacting is better than predicting (a.k.a. investing a.k.a. buying assets that you predict to be valued higher in the future.......), you'll be forever behind the curve. Go be a lemming then. If you believe what I say might be true but simply don't care, there is indeed nothing to be discussed. You are literally saying "Maybe you are right but if you are I'll act like you aren't and keep doing something I shouldn't." You could just as well become schizophrenic and talk to yourself all day. No this is not so: I don’t believe in predicting nor anticipating the market. I believe in finding great businesses and in having a long-term horizon. When something happens for the worst, I want to recognize it and act accordingly. During the past 5 years this strategy yielded a 10% yearly compounded return notwithstanding a large part of my portfolio in FFH which yielded less. Put on top of that a 5% from the fcf of my companies, and I think I can grow 15% for quite a long time still. During the last 5 years the fcf of my companies has been on average 10% of equity. Are there other strategies that might lead to better investment returns? I don’t doubt it! But until I get that 15%... why should I change something that works so well?! Let's debunk that: In theory you could easily have a fraud sensitive stock that is cheap enough to be a better value than an expensive stock with little risk of being a fraud. So to me that translates to valuation always being the number one concern. Everything can be a value (or good short!) at one point. The fact that you can't seem to grasp that concept is concerning. Imo a fraud is a $0. Period. The fact you can't seem to grasp this concept is concerning. Well since you gave the invite to my judgement: It "plummeted" once in 2012 and that was hardly something to write home about. Sadly things were clear for you on the wrong time. Or would you call your returns in FFH a great achievement? Things were clear for you again when you sold out a few weeks ago, exactly when the thesis you believed in finally started playing out. Yes… I had already admitted my timing was horrible! But why keep repeating it?! I really don’t understand what you are aiming at… If you don’t think FFH is a good example, I just kept investing my firm’s free cash in 2008 month after month… ;) Believe it or not but my post comes from a desire to help us all become better investors. You might feel like I'm "out to get you" (and I admit you push my buttons which leads me to comment more directly) but I simply believe you make a lot of bad decisions investment wise and you don't seem to learn. I prefer open and direct communication over acting like I agree with everything you say or even ignoring you. You should welcome opposite views instead of putting your head in the sand. But if you feel you don't get any value out of it, I'll stop making the effort of directing it to you. I'll copy your ostrich policy and start making use of that Ignore function from now on. Consider it activated. ;) There is no doubt about that! But, again, why keep repeating it?! Everybody on this board already knows you disagree with my investment choices… And everybody on this board sees I keep investing the same way over and over again! At least until my capital keeps growing at the rate I want… And everybody on this board knows my limitations as well! The fact you keep pointing them out doesn’t help anyone, believe me! It is like repeating the same thing ten times… If you want to show people how to invest their money, back that with facts instead! Simply do like I am doing: say what you are buying, when you are buying it, and how much you are buying. It will be much more useful for everybody on this board. Cheers, Gio Link to comment Share on other sites More sharing options...
Hielko Posted September 29, 2015 Share Posted September 29, 2015 Because it is painful to watch you self-destruct from the sidelines. Ahah!! But I am barely underwater for the year… After compounding at 22% during the last five years… Are you really worried about my financial well-being?! writser, you are funny 1. You clearly have shit confidence in your judgement as all it takes for you to bail out is a subpoena that isn't anything yet. Let's face it, you get spooked out by stock movements. Your "20% drop in 5 days is rare" comment already showed that. Of course you can believe whatever you want… The truth is: any highly levered company must keep generating lots of cash, like VRX has always done. What happens to that cash if the government intervenes? I am not saying it risks to get impaired, but I am saying that I don’t know… And when there is something so important that I don’t think I can judge with enough confidence, I am not comfortable holding the shares anymore. This is it! Period. 2. If you truly think that reacting is better than predicting (a.k.a. investing a.k.a. buying assets that you predict to be valued higher in the future.......), you'll be forever behind the curve. Go be a lemming then. If you believe what I say might be true but simply don't care, there is indeed nothing to be discussed. You are literally saying "Maybe you are right but if you are I'll act like you aren't and keep doing something I shouldn't." You could just as well become schizophrenic and talk to yourself all day. No this is not so: I don’t believe in predicting nor anticipating the market. I believe in finding great businesses and in having a long-term horizon. When something happens for the worst, I want to recognize it and act accordingly. During the past 5 years this strategy yielded a 10% yearly compounded return notwithstanding a large part of my portfolio in FFH which yielded less. Put on top of that a 5% from the fcf of my companies, and I think I can grow 15% for quite a long time still. During the last 5 years the fcf of my companies has been on average 10% of equity. Are there other strategies that might lead to better investment returns? I don’t doubt it! But until I get that 15%... why should I change something that works so well?! Now I'm confused.... Link to comment Share on other sites More sharing options...
writser Posted September 29, 2015 Share Posted September 29, 2015 No need to. Sometimes Gio includes his income in his investment results. Makes things look more impressive. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 By the way gio, I think we've been doing the opposite trades of each other on this stock for a while. I bought around $112 last year (when you sold), sold around $230 (when you bought), and just bought again at $165 (when you sold). We're obviously thinking about this investment in completely different ways. Picasso, Last year I sold at $140 (after buying at $70 the year before) and this year I bought the bulk of my investment at $200. Mine is not a “cut your losses” strategy… It is what I have said it is: when I think I don’t see clearly something that I consider might be very important, I just lose confidence. And when I have no more confidence, I sell. I am not sure next year Cash EPS might be useful for valuation anymore… Because, if those Cash EPS got hit in the future by government intervention… What then? I simply don’t know… You clearly have a different strategy, and it might work very well for you! That’s fine. But I want to hold a good business for a long time… Answer me: do you know a way to do that with doubts about something that might be of great relevance? Cheers, Gio Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 Now I'm confused.... I have grown the equity of my company through investment results and cash generated by its businesses… And I have tried to break those two components down… As I always do. What’s so confusing? Cheers, Gio Link to comment Share on other sites More sharing options...
Picasso Posted September 29, 2015 Share Posted September 29, 2015 Even the best businesses have doubts all the time. Look at WMT today. $200 billion market cap with $240 billion of invested capital producing 15% ROIC. Stock went from 90's to low 60's because of doubt about their business. How much will WMT be making in 10, 15, 20 years? Probably more than they're making today but suddenly there is doubt because of Amazon or whatever. Look at Berkshire. Trades at one of the lowest price to book multiples in a long time partly because of Buffett's age and such. How much will Berkshire make over the next 10, 15 ,20 years? Again probably a lot more but you always have doubt. The doubt manifests in the price you pay for these things. When VRX was trading at $260 few were wondering whether 26x trailing cash EPS was the right price. It was about the platform value, and Ackman, etc. So yeah throw some doubt in there and it'll go down a hundred bucks with 4x leverage. You have to be okay with the doubts by understanding what you own. Bagehot already outlined a draconian way of getting hit from the 15% non-cash pay earnings and still got around $14 of cash EPS for '16E. So in his/her case that was a risk/doubt which has already been addressed. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 Look at WMT today. $200 billion market cap with $240 billion of invested capital producing 15% ROIC. Stock went from 90's to low 60's because of doubt about their business. How much will WMT be making in 10, 15, 20 years? Probably more than they're making today but suddenly there is doubt because of Amazon or whatever. Look at Berkshire. Trades at one of the lowest price to book multiples in a long time partly because of Buffett's age and such. How much will Berkshire make over the next 10, 15 ,20 years? Again probably a lot more but you always have doubt. But it is quite different! Judgements about the dynamics of any business are very different from guessing what the government might or might not do… Don’t you agree? Cheers, Gio Link to comment Share on other sites More sharing options...
S2S Posted September 29, 2015 Share Posted September 29, 2015 And for everyone showing % changes in drug prices, can we also see $'s? Percentage changes are not that helpful and are like shouting fire in a crowded theatre. Have you tried spending a few minutes on GoodRx or MichiganDrugPrices(dot)com? Don't you find it funny that only the bears do primary research while the bulls just recite management commentary? Where do they say how much of the portfolio those repesent? Lack of disclosure (until a subpoena kicks in I suppose) makes doing a not straighforward exercise, I reckon. But again, as merely an interested observer at the moment, I fail to see why investors should fall hook, line, and sinker for management's words without attempting to verify on their own. Link to comment Share on other sites More sharing options...
Hielko Posted September 29, 2015 Share Posted September 29, 2015 Now I'm confused.... I have grown the equity of my company through investment results and cash generated by its businesses… And I have tried to break those two components down… As I always do. What’s so confusing? Cheers, Gio You write that you compounded at 22% without explaining what that number includes. I think that's very deceptive since this is an investment board and the logical assumption would be that you are talking about investment results. So while you are boosting with your 22% "return" you are actually underperforming almost all major equity indices for the past 5 year... Link to comment Share on other sites More sharing options...
KCLarkin Posted September 29, 2015 Share Posted September 29, 2015 But it is quite different! Judgements about the dynamics of any business are very different from guessing what the government might or might not do… Don’t you agree? Cheers, Gio I remember some Famous Value Investor, saying he avoids companies with regulatory risk. He was talking about For Profit education. Legal and regulatory risk are very hard to handicap because politicians have convoluted incentives. However, the U.S., has a long history of not reigning in health care costs. I believe Hillary already failed to reform healthcare costs once. And historically, the best time to invest in healthcare stocks is when there is regulatory overhang. Link to comment Share on other sites More sharing options...
blainehodder Posted September 29, 2015 Share Posted September 29, 2015 But it is quite different! Judgements about the dynamics of any business are very different from guessing what the government might or might not do Dont you agree? Cheers, Gio I remember some Famous Value Investor, saying he avoids companies with regulatory risk. He was talking about For Profit education. Legal and regulatory risk are very hard to handicap because politicians have convoluted incentives. However, the U.S., has a long history of not reigning in health care costs. I believe Hillary already failed to reform healthcare costs once. And historically, the best time to invest in healthcare stocks is when there is regulatory overhang. It was likely Joel Greenblatt critiquing a Corinthian Colleges pitch from his class. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 I remember some Famous Value Investor, saying he avoids companies with regulatory risk. He was talking about For Profit education. Legal and regulatory risk are very hard to handicap because politicians have convoluted incentives. However, the U.S., has a long history of not reigning in health care costs. I believe Hillary already failed to reform healthcare costs once. And historically, the best time to invest in healthcare stocks is when there is regulatory overhang. Ok, thank you! Cheers, Gio Link to comment Share on other sites More sharing options...
thepupil Posted September 29, 2015 Share Posted September 29, 2015 Now I'm confused.... I have grown the equity of my company through investment results and cash generated by its businesses… And I have tried to break those two components down… As I always do. What’s so confusing? Cheers, Gio You write that you compounded at 22% without explaining what that number includes. I think that's very deceptive since this is an investment board and the logical assumption would be that you are talking about investment results. So while you are boosting with your 22% "return" you are actually underperforming almost all major equity indices for the past 5 year... by the Gio method, my 401K/IRA has compounded at 49% for 4 years (using the initial $18K as the starting amount). Anyone want to give me money to manage? My existing 403B is up 200% in the past 2 years, by your method. despite being invested in short term treasuries. The actual return rate of return for the IRA is 21% (since Oct 2013, performance not measured before then), which is market beating but hardly anything special given it's a hyper concentrated long only account in a bull market. 49% would be impressive, but not representative of investment results). Gio, I think that's why people are kind of piling on here. Link to comment Share on other sites More sharing options...
giofranchi Posted September 29, 2015 Author Share Posted September 29, 2015 You write that you compounded at 22% without explaining what that number includes. I think that's very deceptive since this is an investment board and the logical assumption would be that you are talking about investment results. So while you are boosting with your 22% "return" you are actually underperforming almost all major equity indices for the past 5 year... Ah! But that was just to assure writser that he doesn't need to worry about my financial well-being... He seemed so sorry! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now